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Federal Stafford Loans (Direct Loans)
Federal Stafford Loans offered at UTPA are processed through the William D. Ford Federal Direct Loan Program, also known as Direct Loans. Direct Loans is one of the Federal Student Aid (FSA) programs
offered by the U.S. Department of Education which means that the lender is the U.S. Department of Education rather than a bank or other financial institution. Direct Loans are low-interest loans
for students and parents to help pay for the cost of a student’s education after high school. These types of loans
must be repaid after the student graduates, leaves school or drops below half-time enrollment, and are available to undergraduate and graduate students who are enrolled at least half time. Direct Loans can be either subsidized or unsubsidized depending on a student’s demonstrated financial need.
When students complete the FAFSA and indicate an interest in student loans, they will automatically be considered for a Federal Stafford Direct Loan. Students who did not indicate an interest in student
loans or who did not meet the requirements for a Federal Stafford Direct Loan and are now interested in student loans must complete the “Additional Financial Aid Request Form” available at Financial-Aid Home Page. Due to the large volume of requests we receive, please allow several weeks for the entire process.
Note: First-time borrowers must complete a mandatory Pre-Loan Counseling Session offered by the Financial Aid Office before getting awarded a Stafford Loan. Pre-Loan counseling Sessions are posted on
Pre-loan counseling sessions for first time borrowers are held on on a one-on-one basis in the Financial
Aid Office. Additionally, all Federal Stafford Direct Loan borrowers are required to complete an On-line Entrance Counseling session each year they borrow.
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Direct Subsidized Stafford Loan (SUB Loan)
Direct Subsidized Loans are for students with financial need, as determined by federal regulations based on information provided by the student on their FAFSA. The federal government pays the interest for the student during the following periods:
- While the student is enrolled in school at least half time
- During the six-month grace period after the student drops below half-time enrollment
- During a period of deferment (a period when payments of principal are temporarily postponed)
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Direct Unsubsidized Stafford Loan (UNSUB Loan)
Direct Unsubsidized Loan is not based on financial need. However, students must file the FAFSA to be considered. A Direct Unsubsidized Loan is available to a student who does not qualify for a Direct Subsidized Loan or to supplement a student's Direct Subsidized Loan. The student is responsible for the interest that accrues from the date the loans are disbursed. Students may defer payment of this interest until entering into repayment. Interest is capitalized when entering repayment.
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Interest Rate and Fees
The interest rate on a Stafford loan made on or after July 1, 2009, is fixed at 5.9 percent (undergraduate only). Interest rate on a Direct Unsubsidized Loan remains fixed at a 6.8 percent (undergraduate and graduate). In addition to the interest rates, a loan origination fee that is a percentage of the principal amount of the loan is charged to help reduce the cost of these low-interest loans. Origination fees are deducted before students receive any loan money, so the loan amount received will be less than the amount to be repaid.
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Repayment
Direct Subsidized and Unsubsidized Loans have a 6-month grace period that starts the day after a student graduates, leaves school, or drops below half-time enrollment. Students don’t have to begin making payments until the grace period ends. Students must repay loans even if they don’t complete or can’t find a job related to their program of study, or are unhappy with the education they received and paid for with their loans. After leaving school or dropping below half-time enrollment, students will receive information about repayment. Even if no repayment information is received, students are still responsible for the repayment of the loan. Students may choose a repayment plan suited to their needs.
Generally, students will have from 10 to 25 years to repay loans, depending on the repayment plan they choose. The monthly payment on the loans will be based on how much students borrowed and how long they will take to repay. Under some conditions, students may receive a provision known as a Deferment or Forbearance that allows them to “temporarily” stop or lower their payments. For more information about deferment or forbearance students should visit the Financial Aid Office or call 956/381-2144.
Exit Counseling
As part of the federal requirements for receiving a federal student loan, before leaving UTPA (either graduating, dropping below half time, or withdrawing) students must complete an Exit Counseling Session to make sure they understand their rights and responsibilities as a student loan borrower. In addition, students will receive information about repayment and date when loan repayment begins.
If students received a Federal Stafford Loan (Subsidized or Unsubsidized) on or after Fall 2008, they will be required to complete the Exit Counseling via the Direct Loan Exit Counseling site at www.dl.ed.gov and clicking on the icon below:
Those students who received all their Federal Stafford Loans (Subsidized or Unsubsidized) prior to Fall 2008 under the Federal Family Education Loan Program (FFELP) must complete their Stafford Exit Counseling at www.mappingyourfuture.org and then selecting the top tab labeled “Student Borrower” and clicking on the Stafford Exit tab. Students may also click on the icon below which will hyperlink them to the Stafford Exit Counseling site:
Once students complete their Stafford Exit Counseling sessions online, the Financial Aid Office will be automatically notified within 3 to 5 business days and they will remove the student’s tracking requirement and mark the student’s Stafford Exit Counseling requirement as satisfied so that student will be able to receive a copy of their transcript if needed.
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Federal Stafford Loan Limits
The amount students can borrow per academic year is based on several factors, including federal loan limits, dependency status and grade level. The most that a student can borrow in subsidized and unsubsidized Stafford loans annually is equal to the student's cost of attendance minus other estimated financial assistance, without going over the maximum amounts permitted for the student's academic level.
The loan limits indicated in the chart below are the federal maximums that students can receive. These limits are effective July 1, 2008.
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Academic Loan Limits
Dependent Students: (excluding students whose parents cannot borrow PLUS)
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Base Loan |
Additional |
Total Loan |
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Sub/Unsub |
Unsubsidized Amount |
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| First Year Undergraduate |
$3,500 |
$2,000 |
$5,500 (Freshman) |
| Second-Year Undergraduate |
$4,500 |
$2,000 |
$6,500 (Sophomore) |
| Third Year and Beyond Undergraduate |
$5,500 |
$2,000 |
$7,500 (Juniors & Seniors) |
Independent Students: (and dependent students whose parents cannot borrow PLUS)
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Base Loan |
Additional |
Total Loan |
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Sub/Unsub |
Unsubsidized Amount |
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| First Year Undergraduate |
$3,500 |
$6,000 |
$9,500 (Freshman) |
| Second-Year Undergraduate |
$4,500 |
$6,000 |
$10,500 (Sophomore) |
| Third Year and Beyond Undergraduate |
$5,500 |
$7,000 |
$12,500 (Juniors & Seniors) |
Graduate and Professional Students:
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Base Loan |
Additional |
Total Loan |
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Sub/Unsub |
Unsubsidized Amount |
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| Graduate/Professional Students |
$8,500 |
$12,000 |
$20,500 |
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Aggregate Loan Limits
Federal regulations set aggregate, or total, loan limits in addition to the annual loan limits. Students cannot borrow more than the aggregate loan limit for all subsidized and unsubsidized loans at all schools.
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Type of student
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Max. (subsidized and unsubsidized)
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Dependent Students:
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$31,000 - no more than $23,000 of this amount may be subsidized ($8,000 must be unsubsidized)
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Independent Students: (and dependent students whose parents cannot borrow PLUS)
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$57,500 — no more than $23,000 of this amount may be subsidized ($34,500 must be unsubsidized)
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Graduate and Professional Students
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$138,500 — no more than $65,500 of this amount may be subsidized ($73,000 must be unsubsidized)
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